Russian meat producer Miratorg plans to launch new business lines, boost exports and triple sales within five years as the weaker rouble makes it more competitive locally and abroad, its co-owner and President Viktor Linnik told Reuters.
Russia's biggest producer of pork and beef, Miratorg is among the winners from Russia's restrictions on European and U.S. meat imports imposed in retaliation against Western sanctions over Moscow's role in the Ukraine conflict.
"Now that the rouble is worth what it should be, any production in Russia has become much more profitable," Linnik, who founded and owns Miratorg together with his brother, Alexander, told Reuters in an interview.
Miratorg, which also produces poultry, may now begin lamb production, is planning a new meat processing plant and is considering investing in vegetable growing with a potential capacity of 50,000 tonnes a year.
It also plans to invest around 2 billion roubles ($30.5 million) in manufacturing leather from cattle hides and is in talks with a foreign carmaker over supplying its Russian plant with hides for use in car interiors, Linnik said.
"We have many synergy effects. For the next 10 years we have a clear understanding about what we are going to do."
SANCTIONS OR NOT
Linnik said the company was targeting annual turnover of between $5 billion and $7 billion within five years, compared to around $1.4 billion in 2015, as meat production will double to around 1 million tonnes.
"As to sanctions - whether they remain or not, to be honest we don't care," Linnik said.
He said his business was influenced by factors that are more long-term than sanctions, including import duties imposed on Russian products, and veterinary controls that prevent Russians importing some meat products.
Linnik said Miratorg planned to boost exports in order to sell 25 percent of its meat outside Russia, from around 5 percent now.
"We will make a breakthrough very soon," Linnik said, adding 10 percent of production could go to China, although it has yet to secure certificates from Chinese veterinarians.
Linnik said he expects that access for Miratorg's meat to the Chinese market will be discussed during President Vladimir Putin's visit to Beijing later this year.
The company also sees sales growth in the Middle East, including Iran, Saudi Arabia, and the United Arab Emirates, and Asian markets such as Japan and South Korea.
Last week, it supplied poultry meat to the European Union for the first time and also hopes to sell types of beef that are not subject to EU import duties to Europe, Linnik said.